In India, most people consider the Employees’ Provident Fund (PF) only as a source of retirement funds or savings. However, the reality is that this account provides significant financial security to employees even during their employment. The Employees’ Provident Fund Organisation (EPFO) provides its members with pension and savings facilities, along with life insurance. This insurance is provided through the EDLI (Employees’ Deposit Linked Insurance) scheme. The objective of this scheme is to provide financial support to the employee’s family during difficult times.
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What is the EDLI scheme?
The EDLI scheme is an insurance scheme that is automatically provided to employees linked to PF. As soon as an employee’s PF account is opened, they are included in this insurance coverage. The employee does not need to apply separately for this scheme. This facility is entirely linked to employment, and its purpose is to provide financial security to the family in case of any unfortunate event during employment.
The employee does not have to pay any money
The biggest feature of this scheme is that the employee does not have to pay a separate premium for it. The entire cost of the insurance is borne by the company or employer. Because of this, this facility does not become an additional financial burden for the employees, and they get insurance coverage for free.
How is the insurance cover of up to Rs 7 lakh determined?
The insurance amount under the EDLI scheme is based on the employee’s salary. It takes the average of the basic salary and dearness allowance for the last 12 months. 35 times this average salary is given as insurance cover. In addition, an additional amount of up to Rs 1.75 lakh is added.
The EPFO has set the maximum salary limit for this calculation at Rs 15,000. Based on this, the maximum insurance amount reaches up to Rs 7 lakh, which is considered the biggest benefit available under this scheme.
How can the family claim?
If a PF member dies during their employment, their nominee or legal heir can claim this insurance amount. For this, the EDLI Form 5 IF has to be filled out and submitted to the EPFO office. Along with the claim, a death certificate, identity proof, bank details, and documents related to the date of birth must be submitted.
The EPFO aims to settle claims within approximately 30 days. There is also a provision for paying interest to the claimant if there is a delay in the process.
Benefits for Employees
Even if an employee has spent some time without pay, the EDLI claim is not automatically rejected. This provides relief to many employees and their families. The EPFO strives to ensure that as many people as possible benefit from this scheme.
Keeping Nominee Information Updated is Essential
The benefit of this scheme is first given to the nominee registered in the PF account. If no nominee is registered, the spouse, sons up to 25 years of age, or unmarried daughters can claim the benefit. Therefore, employees should update their e-nomination in their PF account promptly to avoid any difficulties for their family in the future.
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Rohit P
My name is Rohit Pal, and I have been working in the field of journalism for the past five years. During this time, I have written on a variety of topics, including business, automobiles, technology, and politics. I have worked with several major organizations and am currently working with Timesbull.
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